Putnam Spectrum Funds

Seeking returns from opportunities
in leveraged companies

With a career that spans the history of
leveraged investing, portfolio manager David Glancy has deep expertise and specialized skills.

About leveraged companies

Putnam Capital Spectrum Fund and Putnam Equity Spectrum Fund target the growth potential of leveraged companies — those that use debt or preferred stock as a tool to improve their business performance. Although the funds invest primarily in companies that are leveraged, they do not use leverage themselves as a primary investment strategy.

Leverage tends to accelerate business changes at a company, potentially increasing returns on equity. Leverage creates complexity, which makes it more likely that securities of these companies — common and preferred equity, high-yield bonds, and bank loans — will be mispriced, offering great opportunities to investors who can analyze them correctly and are willing to assume their risks.

Leveraged company funds can add a new dimension to investment portfolios because they offer attractive total return potential with different performance characteristics than the broad stock and bond markets.

Some companies take on leverage at the right time for the right reasons. Others do it at the wrong time, or for the wrong reasons. Either of these situations can still result in investment opportunities. But each needs to be analyzed thoroughly.

Read David Glancy’s latest insight into why leveraged companies are choosing to pay more for financing.

Product Information
Fund Fact Sheets (pdf)
Literature (pdf)
Putnam Investments

Consider these risks before investing: Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Our focus on leveraged companies and the fund's "non-diversified" status can increase the fund's vulnerability to these factors. Our use of short selling may increase these risks.

Additional risks associated with Putnam Capital Spectrum Fund: Funds that invest in bonds are subject to certain risks including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. Unlike bonds, bond funds have ongoing fees and expenses. Lower-rated bonds may offer higher yields in return for more risk. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Long-term bonds are more exposed to interest-rate risk than short-term bonds. Unlike bonds, bond funds have ongoing fees and expenses. Our focus on leveraged companies and the fund's "non-diversified" status can increase the fund's vulnerability to these factors. Our use of short selling may increase these risks.

Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus or summary prospectus containing this and other information for any Putnam fund or product, click on the prospectus section or call your financial representative or call Putnam at 1-800-225-1581. Please read carefully the prospectus if available before investing.

Putnam Retail Management